This Ruling sets out guidance on when a company carries on a business within the meaning of ‘small business entity’ in section 23 of the Income Tax Rates Act 1986 as applicable in the 2015–16 and 2016–17 income years and section 328-110 of the Income Tax Assessment Act 1997.

TR 97/11Income tax: am I carrying on a business of primary production?

This Ruling sets out guidance on whether or not a business of primary production is being carried on, but the indicators discussed are relevant to any business.

Supporting information

The supporting information we need for a private ruling or objection about whether you are carrying on a business includes:

details about your activity

when your activity commenced

a description of your activity

details of equipment and facilities you use in your activity (including depreciation schedules)

the records you keep in respect of your activity

your main clientele – for example, general public, friends or workmates

how your products or services are advertised

details about your plans for the activity

a copy of your business plan

a copy of profit and loss statements (that is, income and expenses)

projected profit and loss statements showing how you intend to make a profit from your activity

details of any professional or expert advice you have sought in setting up or conducting your activity

details about you

any qualifications or expertise you possess in respect of your activity

any relevant organisations you are a member of

relevant publications you subscribe to

copies of any relevant licences, government approvals or planning permits you have obtained or applied for

how much time you spend on this activity each week

whether you are engaged in employment or another business activity and the amount of time you spend on these activities each week.

Share trading

If your activity is one of share trading or other share market activity, please also provide the following information and documents:

a description of your trading strategy and why you expect it will result in a profit

details of your trading transactions for the relevant period

details of the amount of capital you have had invested at different times (giving an indication of the maximum and minimum amounts)

the amount of capital you have available and the sources of your capital.

Note: If you've previously provided us with any of the supporting information listed here, you don't need to provide it again.

Applying for a private ruling

If you want to apply for a private ruling about whether you are carrying on a business, you need to:

complete and submit the relevant private ruling application form (for tax professionals or not for tax professionals)

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